John F. Manning, Sr. v. Crystal Joan Manning ( 2016 )

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
May 25, 2016 Session
JOHN F. MANNING, SR. v. CRYSTAL JOAN MANNING, ET AL.
Appeal from the Chancery Court for Hamblen County
No. 2014CV83 Douglas T. Jenkins, Chancellor
No. E2015-02082-COA-R3-CV-FILED-JUNE 30, 2016
This appeal involves the interpretation of a marital dissolution agreement. Pursuant to
the agreement, the husband and wife agreed to waive any interest in the other party‟s
retirement account upon the dissolution of the marriage. The husband failed to effectuate
the change to his retirement account. Upon his death, the wife refused to sign
documentation waiving her right to the benefits. The administrator of the estate filed suit.
The parties filed competing motions for summary judgment. The trial court granted
summary judgment to the wife. The administrator appeals. We reverse the judgment of
the trial court and direct entry of summary judgment in favor of the administrator.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Reversed; Case Remanded
JOHN W. MCCLARTY, J., delivered the opinion of the Court, in which CHARLES D.
SUSANO, JR., J. and D. MICHAEL SWINEY, C.J., joined.
H. Scott Reams, Morristown, Tennessee, for the appellant, John F. Manning, Sr.
David H. Stanifer and Neal W. Stanifer, Tazewell, Tennessee, for the appellee, Crystal
Joan Manning.
OPINION
I. BACKGROUND
Crystal Joan Manning (“Wife”) and Jeffrey Kent Manning (“Husband”) were
married in July 1996. No children were born of the marriage. After approximately three
years of marriage, Wife filed a complaint for divorce. The parties were divorced by order
of the court on November 9, 1999. A marital dissolution agreement (“the MDA”) was
incorporated into the final decree. While neither party amassed significant assets in the
short duration of the marriage, each party held a retirement account with the other party
listed as the beneficiary. As pertinent to this appeal, the MDA provided as follows:
Each party agrees to waive any interest he/she may have in the other party‟s
retirement. Wife agrees to waive any interest she may have in Husband‟s
Eaton Vance Growth Fund, bank accounts and certificates of deposit.
***
Each of the parties shall execute, acknowledge and deliver any and all
instruments and documents in writing which shall reasonably be required
for purposes of effectuating the provisions and intent of this Marital
Dissolution Agreement.
Husband died intestate on October 16, 2013. At the time of his death, Wife was still
listed as the beneficiary to his 401(k) retirement account with JTEKT North America,
Inc. (“JTEKT”).
As the administrator of Husband‟s estate, John F. Manning, Sr. (“Administrator”)
attempted to contact Wife to obtain an authorization form directing the disbursement of
the benefits from the retirement account to the estate. Having received no response,
Administrator filed suit against Wife and JTEKT on February 28, 2014. Administrator
requested a declaratory judgment finding that Wife waived any interest in the account
pursuant to the provisions of the MDA. He also sought an order requiring the execution
of a waiver as may be necessary to direct the disbursement of the benefits to the estate.
JTEKT indicated its intent to disburse the benefits to the party designated by the court.
Wife filed an answer in which she admitted that she agreed to the provisions of the MDA
but denied that she waived her interest in the retirement account. She requested dismissal
of the suit and disbursement to her as the named beneficiary.
The case proceeded to discovery. Wife was deposed on July 28, 2014. Her
deposition testimony revealed that she removed Husband as the named beneficiary on her
retirement account following the entry of the MDA. She acknowledged that the MDA
provided Husband with the authority to do the same and that she agreed to execute any
waivers necessary to waive her claim to his retirement account. However, she asserted
that his failure to remove her as the named beneficiary indicated his intent to gift the
benefits. She explained,
I‟m saying that I feel that he meant for me to have it because he was a very,
very intelligent, level-headed, conscientious man when it came to his
money. He had a head on him. Because he always paid cash for
-2-
everything. And I don‟t think he forgot to change that. He had from the
year of [1999] to when he got sick to make this change if he had intended it
and I don‟t think he forgot it.
She agreed that she would no longer possess a claim to the benefits if he had changed the
named beneficiary on the account. She acknowledged that they adhered to the remainder
of the requirements in the MDA without incident.
Wife acknowledged that with the exception of one phone call, she did not maintain
contact with Husband following the divorce and that she was reliant upon others to learn
of his whereabouts and life circumstances. She explained that he refused to speak with
her when she telephoned him to express her sympathy after she learned that his father had
received a cancer diagnosis.
Administrator filed a motion for summary judgment, alleging that the undisputed
facts required the disbursement of the benefits to the estate. In support of his motion, he
attached Wife‟s deposition testimony and a statement of undisputed material facts in
which he alleged, in pertinent part, as follows:
(1) that the MDA represents the agreement between Wife and Husband;
(2) that Wife agreed that she would not have any claim to Husband‟s
retirement;
(3) that Wife agreed that she would execute any writings necessary to
waive any claim that she had to the retirement of Husband; and
(4) that Wife refuses to sign documents waiving her claim to Husband‟s
retirement at JTEKT.
Wife requested dismissal of the motion for summary judgment and filed her own
motion for summary judgment, alleging that the undisputed facts required disbursement
of the benefits to her as the named beneficiary. In support of her motion, she filed a
statement of undisputed material facts in which she alleged, in pertinent part, as follows:
(1) that Husband changed certain beneficiaries after the divorce of the
parties, but he did not change the account that is in dispute before the court
and
(2) that Wife agreed that she would execute any document to waive any
claim as a beneficiary upon the same being presented to her, and Husband
-3-
chose not to remove her as the designated beneficiary on the account that is
the subject of this litigation and
(3) that Wife refuses to sign any documents waiving her claim to
Husband‟s retirement account that he did not change during his lifetime;
and, therefore, left her sole beneficiary of the same.
Following a hearing, the court denied Administrator‟s motion for summary judgment and
entered summary judgment in favor of Wife.1 Citing Bowers v. Bowers, 637 S.W.2d 456
(Tenn. 1982), the court directed disbursement of the benefits to Wife as the named
beneficiary. This timely appeal followed.
II. ISSUE
We consolidate Administrator‟s two issues into the following single and
dispositive issue: Whether the court erred in granting summary judgment in favor of
Wife.
III. STANDARD OF REVIEW
The appropriate summary judgment standard to be applied is as follows:
[W]hen the moving party does not bear the burden of proof at trial, the
moving party may satisfy its burden of production either (1) by
affirmatively negating an essential element of the nonmoving party‟s claim
or (2) by demonstrating that the nonmoving party‟s evidence at the
summary judgment stage is insufficient to establish the nonmoving party‟s
claim or defense.
Rye v. Women’s Care Center of Memphis, MPLLC, 477 S.W.3d 235, 264 (Tenn. 2015).2
When a properly supported motion is made, “the nonmoving party „may not rest upon the
1
Neither party filed a transcript or statement of the evidence for this court‟s review.
2
We believe the standard set forth in Rye is controlling and must be applied retrospectively, despite the
legislature‟s codification of Tennessee Code Annotated section 20-16-101, a similar, if not identical
standard which provides as follows:
[T]he moving party who does not bear the burden of proof at trial shall prevail on its
motion for summary judgment if it:
(1) Submits affirmative evidence that negates an essential element of
the nonmoving party‟s claim; or
-4-
mere allegations or denials of [its] pleading,‟ but must respond, and by affidavits or one
of the other means provided in [Rule 56 of the Tennessee Rules of Civil Procedure], „set
forth specific facts‟ at the summary judgment stage „showing that there is a genuine issue
for trial.‟” Id. at 265 (quoting Tenn. R. Civ. P. 56.06). Summary judgment “shall be
rendered forthwith if the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show that there is no genuine issue
as to any material fact and that the moving party is entitled to a judgment as a matter of
law.” Tenn. R. Civ. P. 56.04.
“We review a trial court‟s ruling on a motion for summary judgment de novo,
without a presumption of correctness.” Rye, 477 S.W.3d at 250 (citations omitted). “In
doing so, we make a fresh determination of whether the requirements of [Rule 56] have
been satisfied.” Id. (citations omitted). We must view all of the evidence in the light
most favorable to the nonmoving party and resolve all factual inferences in the
nonmoving party‟s favor. Martin v. Norfolk S. Ry. Co., 271 S.W.3d 76, 84 (Tenn. 2008).
IV. DISCUSSION
Administrator argues that the court erred in denying his motion for summary
judgment when the MDA specifically provided that each party agreed to waive his or her
interest in the other party‟s retirement account. He claims that the court was without the
requisite authority to modify the provision and that the record is devoid of any evidence
upon which such a modification might be based. Citing Bowers and Lunsford v.
Lunsford, No. M2004-00662-COA-R3-CV, 2005 WL 2572389 (Tenn. Ct. App. Oct. 12,
2005), Wife claims that her designation as beneficiary is a matter of contract between
Husband and JTEKT and that such designation may only be changed pursuant to the
procedure designated in the contract. Administrator claims that the facts presented in
Bowers are inapposite to the facts presented in this case and that this case is more closely
aligned to the factual scenarios presented in Lunsford and In re Estate of Ellis, No.
M2012-00585-COA-R3-CV, 2013 WL 1187419 (Tenn. Ct. App. March 20, 2013), perm.
app. denied (Tenn. Aug. 14, 2013).
In Bowers, the property settlement agreement incorporated in the divorce decree
included a clause “wherein wife released husband from all claims arising out of the
marital relationship and waived any other rights not provided for therein.” 637 S.W.2d at
456. When husband died unexpectedly, wife claimed entitlement to the proceeds from
his life insurance policy as the named beneficiary. Id. The Supreme Court held that the
(2) Demonstrates to the court that the nonmoving party‟s evidence is
insufficient to establish an essential element of the nonmoving party‟s
claim.
-5-
settlement agreement “had no force and effect whatever upon the life insurance policy”
and that “neither the agreement nor the divorce terminated wife‟s status as named
beneficiary in the policy” when her status as a named beneficiary was not a “property
right” arising out of the marital relationship. Id. at 458-59.
In Lunsford, this court affirmed the trial court‟s decision to divest the wife of any
interest in the husband‟s retirement account as the named beneficiary at the time of his
death based upon the following provision in the marital dissolution agreement:
Each spouse hereby further waives and releases except as otherwise
provided herein, any right, title and interest which he or she may have now,
or in the future, to any retirement payment or annuity by virtue of his or her
being the spouse of the other party, and by virtue of such other party‟s
employment, or by virtue of any other retirement program, plan or pension
system which may have included the other party in the past, or which may
include such other party now, or which may include the other party in the
future. To this end both parties declare that it is each‟s (sic) intent that this
provision have the same force and effect as if he or she had signed any
waiver forms releasing his or her aforementioned interest, but each further
agrees to execute whatever documents may be required in this regard in the
future, as necessary, to accomplish the purposes heretofore stated.
2005 WL 2572389, *1-2. We recognized the contractual relationship between the
husband and the company funding the retirement account before ultimately holding that
the wife possessed a “continuing duty to execute whatever documents that may be
required to accomplish the purpose and intent of the marital dissolution agreement.” Id.
at *3.
In Ellis, this court affirmed the trial court‟s decision to divest the wife of any
interest in the ownership of funds that were held in jointly titled accounts at two banking
institutions at the time of the husband‟s death. 2013 WL 1187419, at *1. In so holding,
we agreed with the trial court that the marital dissolution agreement providing the
husband with ownership of the accounts was tantamount to an amendment to the existing
contract with the banking institution. Id. at *4. We further stated,
The joint accounts at issue in the present case meet the definition of marital
property and were appropriately included in the provisions of the Marital
Dissolution Agreement. As our courts have stated, once an MDA has been
approved by a trial court, both parties obtain a vested interest in the
property allocated to them, and neither party may frustrate the other‟s
receipt of his or her vested interest.
-6-
Id. at *6. (internal citations omitted).
The facts presented in Bowers are simply inapposite to the facts presented in this
case. We agree with Administrator that this case is more closely aligned with the facts
presented in Lunsford and to an extent, Ellis. Here, the MDA specifically addressed the
divestment of Wife‟s interest in the retirement account at issue. An MDA incorporated
into a final decree of divorce “is a contract which is binding on the parties.” Stiel v. Stiel,
348 S.W.3d 879, 885 (Tenn. Ct. App. 2011). Generally, once a contract is formed it
cannot be modified without consent and additional consideration for the new terms.
GuestHouse Intern., LLC v. Shoney‟s North America Corp., 330 S.W.3d 166, 190 (Tenn.
Ct. App. 2010). While Husband failed to remove Wife as the named beneficiary, his
failure does not evidence intent to modify when Wife possessed continuing obligations to
waive any right she may have held in the account and to execute any documents
reasonably required for the purpose of effectuating the provisions in the MDA. The
record is simply devoid of any evidence establishing a modification of the MDA.
Accordingly, we reverse the judgment of the trial court and direct entry of summary
judgment in favor of Administrator.
V. CONCLUSION
The judgment of the trial court is reversed, and the case is remanded to the trial
court for such further proceedings as may be necessary consistent with this opinion.
Costs of the appeal are taxed to the appellee, Crystal Joan Manning.
_________________________________
JOHN W. McCLARTY, JUDGE
-7-